Markets and News!

Week started on a bad note but ending on a good note thanks to that monster rally we saw yesterday. Looks like BJP is pulling ahead faster and faster to the position of advantage in Gujarat election. Things are looking much better for BJP now and 110 seats which was looking distant dream is looking a very much probability now. Added to this the global positivity with US ending green and Asia in full green India will start positive today. The fundamentals are also supporting now and that is the great news.

The big news of today is Govt’s announcement of amendments in Electricity laws. According to the new law, uninterrupted power is the right of everyone and this could be a game changer. From March 2019, uninterrupted power supply is a right of everyone and unnecessary load shedding can lead to penalizing the power companies. This will auger well for many stocks in power and manufacturing sector.

Futures and Options!

In derivatives market, some bullishness has appeared as call shorting has suddenly stopped. Lot of unwinding of short calls was seen at 10200 and 10300 calls and 10100 put is being shorted. The premium of 10100 put nearly halved from 150 rupees at the beginning of the day to 88 rupees at the end of the day. Nearly 1.2 lakh contracts were built there. That means the put call ratio has started to go up. From 1.11 at the beginning of the day it went up to 1.19 at the end of the day.

On the IPO front Shalby hospitals did some work yesterday and the IPO closed at 2.8x with NIIs going big time to buy this. The NII quota remained unsubscribed while QIB oversubscribed by 4.3x times. I expect a weak start to this IPO when it lists on 15th December. On the other hand Future supply chain is also 0.74x subscribed till yesterday and today is the last day for the IPO.

What is the NIFTY strategy for the day?

If you have taken a long position yesterday, keep it intact. If you have avoided, then its a good chance to go for a long position. NIFTY will open around 10170 levels and any dips towards 10150 should be used as an opportunity to buy. Keep a target of 10400 for Gujarat and it will be reached if you have patience. If any calamity occurs inbetween you can always. Exit!